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Friday, July 17, 2009

Refining a P2 target

Based on trendlines and waveforms, I plotted a presumptuous P2 target and date.

Back in June I theorized P2 would continue to a new rally peak in a double zigzag and bullish sentiment would reach an ultimate extreme. I just figured P2's window was extremely limited.

I was wrong and it was too much to expect P2 to have ended so soon when P1 lasted some 17 months. I think I just wanted to be different and push the envelope. In the end, it was too much arguing a moot point for something that didn't materialize. I learned much from that. It's OK to go against the grain with your counts, but you better be right. I of course quickly switched to the backup alternate count and switched my Intermediate wave locations and went with a second (X) wave pullback.

I then theorized on many occasions and using logic, that if the market couldn't achieve a price high in a double zizgag it would then make a triple zigzag to reach a proper peak and also to satisfy time requirements. My 1930 rally chart seems to support that theme of a triple zigzag.

I also theorized that if a triple zigzag was to occur, then the start point of the third and final zigzag should NOT start at a lower spot then where the second zigzag started. So I called 869 the bottom of a second (X) wave on the day it happened

I was, I admit, doubtful, but largely stuck to my guns. After all, I was going against most technicians and even EWI and ignoring the H&S. However I was closely tracking sentiment and it looked like a good turning point was near.

So then a rally. And boy it was big. 2 strong up days of 90% (I am not confirmed that the first was 90%). And that usually marks a trend change.

So it would seem a triple ZZ is looking good for the count to p2 peak. Bullish sentiment has just started to correct. P2 should peak at a new high of bullish sentiment. That is basic EW theory not just my judgement or opinion. My $BPSPX chart shows that there is plenty of room to run up. And if a near term B wave correction comes, then that should halt the upward shot momentarily.

The Great-Great Bear trendline I show in this chart may mark the top of any rally.

I may not have it at the precise spot, only the market knows that. However a break over the smaller trendline has occurred in my opinion. That means the market is free to run to the next trendline which is really a Fib fan line.

Now lets see how Monday cooperates with all these fancy projections. I certainly have backup counts and there is a lot of bearish talk of a huge collapse next week due to post -OPEX. I don't possess a crystal ball afterall.
But hopefully this post gives a general overview and ties together what I have been tracking and talking about for a month or more and explains my previous posts and assumptions. I know I tend to shotgun a lot of stuff.
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